The Case for ‘Regrexit’: Why Britain Won’t Really Leave the EU

Despite the Brexit vote, Britain will remain a de facto member of the European Union, writes Peter Vanham, Global Leadership Fellow at the World Economic Forum who is based in Belgium, in this opinion piece. (The views expressed in this opinion piece are his own and not those of the World Economic Forum.)

It’s irreversible. The people have spoken, David Cameron threw the towel, and it’s still unclear who will take over the Britannia ship. “Out is out,” as EU Commission President Jean-Claude Juncker had warned.

Yet Britain cannot and will not leave the EU. Why? Because any scenario in which it does is worse for all parties involved than any scenario in which it doesn’t. In such case, John Nash’s prisoner’s dilemma tells us what the equilibrium outcome will be, and Belgium’s surrealism tells us what its name will be: Britain will remain a de facto member of the Union — we just won’t call it a Regrexit.

Consider for a moment the scenario in which Britain does leave the EU (which it has to in order to respect the outcome of the non-binding referendum on its membership). In this case, all of the below events are likely or certain to happen in the UK: a secession by Scotland, a sour and lingering generational dispute, a mass exodus of talent and companies, an economic recession, a deficit in government budget and pension fund payouts, and a real estate crisis. As a matter of fact, many of those consequences are already in the works.

“Countries on both sides of the North Sea have a lot to lose from a real Brexit.”

If these kinds of consequences were solely contained to Britain, the reaction of EU leaders would be easy to guess: bye, bye, Britain. Angela Merkel, Wolfgang Schauble, and others in the same mindset as Jean-Claude Juncker have had enough of British leaders’ lukewarm attitude towards the EU.

An Intricate Web

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But as always, there is a catch. As has become clear over the last few days, the negative consequences of a British exit are never contained to the UK. In Europe’s web of trade and finance, everything is connected. All of Europe’s stock exchange indices, including the German DAX and the French CAC, went deep into red territory in recent days. Italy’s banks might need a 40 billion euro bailout because of their exposure to the UK. Belgium, The Netherlands and Luxembourg will see their exports to the UK fall steeply.

Those consequences are just the financial ones. Then there are the political ones. Eastern European leaders have already been asking for the resignation of EU Commission President Jean-Claude Juncker. Extreme right politicians and their supporters are asking for a referendum in The Netherlands and France. And if Scotland were to gain its independence, Catalonia would no doubt be next to ask for the same, which would add insult to injury for Spain’s struggling leadership.

The result is that countries on both sides of the North Sea have a lot to lose from a real Brexit.

Consider, then, the alternative outcome. What would be lost if Britain remained in the EU despite its referendum? In the UK, to begin with, a lot of people who voted out would be upset. Fifty-two percent of voters had backed a Brexit, and they would be disappointed if it didn’t happen. Some of them might turn away from the traditional Labour and Tory parties, and give a protest vote to the UK Independence Party.

But no heads would roll – indeed, they already did. Young people wouldn’t get on the streets to revolt – indeed, they would rather do so if there was a Brexit. Financial markets wouldn’t panic; to the contrary, they would calm down.

“The compromise will be that Britain will be a different member of the Union than before, to respect its referendum.”

Back in Europe, there might be some grumbling from Europe’s heads of state and government — but the call for resignations, referenda on independence and a departure from the EU in many countries would go mute. The bailout of Italy’s banks wouldn’t be needed. The exports from the Benelux and Ireland would return to normal levels.

Of course, politicians on both sides would need to be able to explain to voters they didn’t betray them. In Britain, the next head of government would need to call the revived British membership something else than before. In Europe, the same would be expected — “out is out,” right?

But in the end, the Belgian nature of the European Union would prevail. If you live in a place for a long time, you take over its habits. The Belgian nature is one of compromise and surrealism. The compromise will be that Britain will be a different member of the Union than before, to respect its referendum. The surrealism aspect will be that while it will remain a de facto member, nobody will call it that.

Or, as Belgium’s most famous and most Belgian painter — René Magritte — would say: “Ceci n’est pas un Regrexit.”

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4 Comments So Far

Robert Griffiths

The author seems to be suggesting that i) democracy is OK as long as people don’t vote against your policies, ii) that we should ignore what the voters say, because the likes of politicians and the World Economic Forum know better, iii) that all the calamitous consequences outlined by the author will automatically come to pass, and iv) that the EU does not require major reform, especially along the lines of listening to whether people really want a federal Europe, (and if so at what speed and extent), and whether they want a body-politic such as the European Commission, which is unelected by the people, and yet has the power to legislate without real say by the national electorates.
There have been all sorts of allegations in the media that the English and Welsh voters who voted to leave (en masse) must all be bigoted, xenophobic, old or poor, or devotees of the likes of UKIP and the extreme right. What disdain for the facts!
Either way, if my understanding of the author’s intentions is erroneous, I apologise. But any suggestion that the UK cannot and will not leave the EU, or that the UK or EU politicians should ignore the referendum, seems to me to be the very reason why so many people in the UK and the EU want reform.
Perhaps an alternative to Regrexit, is a fundamentally reformed EU in which the national electorates are asked to have a say.
The author asks: What would be lost if Britain remained in the EU despite its referendum?
He fails to add another key answer: any respect by the ruling class for the democratic process would be lost.
I think most people in Europe believe that collaboration and understanding is preferable to competition and distrust, particularly when it comes to resolving global problems.
However, in politics, as in life, it is one thing to share common objectives, quite another to share the means or rules by which we achieve them. I for one, prefer a democratic process over an autocratic one. Indeed, one of the main guiding principles behind a United Europe was to avoid the calamitous wars of its recent and not so recent history. Telling people what is best for them, and ignoring them when they voice their opinions, is not likely to achieve this shared objective.

Anthony Adams

There are middle-road solutions available for Britain. Bilateral agreements with the EU, similar to Switzerland, will enable all the benefits needed for Britain to beneficially coexist with the EU.

To say that exports to the Britain by various EU countries will suffer, is utter nonsense. It may be confusing for everyone for a short time, but in the long run demand for goods and services will prevail and bilateral deals will be made to accommodate the market.

PS: Consider all the money currently paid to Brussels that Britain will save. I think this article must have been written before the vote, as a contribution to fear mongering. Britain will do just fine, actually better outside the Union.

Scotland… that is another issue. a wildcard that could change the dynamics of the UK one way or another.

wolf.gehrisch@laposte.net

Britain should indeed follow the Swiss example. Switzeland is doing fine without being member of the EU. But at the same time it has no say in EU politics and that is fine too. As is said in the article above, British politicians have always had a lukewarm attitude towards the EU. Maybe without the UK the EU finds strength to starta new chapter.

Anonymous

It’s not at all unusual to find in both constitutional and corporate law special majority voting, like a two-thirds majority or a 75% majority. In all these cases a 51% vote is rejected without anyone calling it “undemocratic”.

Another issue is that not all things are suitable to be subjected to a referendum, because they are simply too complicated. That is why in these matters countries have bureaucracy experts who advice elected politicians, who then take the decision. That is what they are elected for. I’m afraid EU membership is one of those issue, and the symmetric result (52%-48%) more or less confirms this; for many voters it was a flip of the coin. A referendum on a much easier to understand topic, like e.g. capital punishment, would no doubt have had a more contrasted result.

To put it in a even sharper perspective, would you drive your car over a bridge of which the material was chosen by referendum?